Tesla Weathers First Recall

Tesla recalls 439 roadsters

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    NEWSLETTERS

    Tesla Motors
    Meet the new-look Tesla Roadster 2.5 -- don't worry, it's a lot like the old-look Roadsters.

    Palo Alto-based Tesla's stock seems to have weathered its first recall. In the week following a voluntary recall of its Roadster models 2.0 and 2.5 because of a fire risk, the stock has dipped $1.50 or about three percent.    The day before the recall, the stock was valued at $22. Today it is hovering around $20.50

    The recall of 439 vehicles was issued last Friday after one customer reported a cable chaffing and "causing a short, smoke and possible fire behind the right front headlamp of the vehicle."

    The cable in question carries power to the car's lights, air bags and other systems.  It isn't the cable that powers the electric motor.  

    Tesla has spent the last week checking the routing of the 12V cable and installing a protective sleeve around it.

    Tesla is still seen as a Silicon Valley darling of sorts because of its green theme as well as the company's ability to fund itself.  Tesla has the support from the likes of Goldman Sachs, Morgan Stanley and JP Morgan.  You can add to that Silicon Valley venture capitalist money.

    It is one of the few IPOs of the year. It went public in June.

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    Telsa is also a Bay Area darling because it moved in to the former NUMMI plant. Company officials announced this week that they plan to double the number of engineers it employs as it begins to take over the Fremont facility.  Right now Tesla has about 800 employees and they expect that number to grow to 1,000 in the next calendar year.

    It has its critics who point out the rate of spending and the time it is going to take for the company to become profitable.